Current through Register 1531, September 27, 2024
(1)
Statement of Purpose;
Application; Outline.
(a)
Purpose. The purpose of 830 CMR 94.323.1 is to
describe the rules for the establishment and maintenance of Deposit Transaction
Funds by bottlers and distributors, and for the collection of abandoned deposit
amounts from such Deposit Transaction Funds, as required by M.G.L. c. 94,
§§ 321 through 327, inclusive, and the Supreme Judicial Court's
decision in Massachusetts Wholesalers of Malt Beverages, Inc., v.
Commonwealth, 414 Mass. 411 (1993), and the Appellate Tax Board's
decision in Adirondack Beverages Corporation v. Commissioner of
Revenue, Docket Nos. C267064 and C275091 (June 1, 2007).
(b)
Application. 830
CMR 94.323.1, applies to bottlers and distributors who are subject to the
provisions of M.G.L. c. 94, § 323(c), (d) or (e) with respect to the
refund values received by such bottlers and distributors for non-reusable
beverage containers sold on or after January 1, 1990.
(c)
Outline. 830 CMR
94.323.1, is organized as follows:
1.
Statement of Purpose; Application; Outline.
2. Definitions.
3. Deposit Transaction Fund.
4. Monthly Reporting to the
Commissioner.
5. Abandoned Deposit
Amounts.
6.
Reimbursements.
7. Borrowing From
Deposit Transaction Fund.
8.
Enforcement Provisions.
9.
Examples.
(2)
Definitions. For the purposes of 830 CMR 94.323.1, the
following terms shall have the following meanings, unless the context requires
otherwise:
Abandoned Deposit Amounts, amounts
deemed to constitute abandoned deposit amounts under M.G.L. c. 94, § 323C,
and calculated in accordance with 830 CMR 94.323.1(5).
Beverage, soda water or similar
carbonated soft drinks, and beer and other malt beverages, but does not include
alcoholic beverages other than beer and malt beverages, as defined in M.G.L. c.
138, natural fruit juices or wine.
Beverage Container, any seal able
bottle, can, jar, or carton that is composed primarily of glass, metal,
plastic, or any combination of those materials, which is produced for the
purpose of containing a beverage, but not including containers made of
biodegradable material.
Bottler, any person filling beverage
containers for sale to distributors, dealers, or consumers, including any
dealer who bottles or sells its own brand of beverage.
Commissioner, the Commissioner of
Revenue or the Commissioner's designee duly authorized to perform the duties of
the Commissioner.
Consumer, any person who purchases a
beverage in a beverage container for use or consumption with no intent to
resell such beverage.
Dealer, any person, including any
operator of a vending machine, who engages in the sale of beverages in beverage
containers to consumers.
Department, the Department of
Revenue.
Deposit, an amount equal to the refund
value paid by a consumer, dealer, or distributor in connection with the
purchase of a non-reusable beverage container.
Deposit receivables, an amount equal
to the refund values of non-reusable beverage containers sold by a bottler or
distributor for which such bottler or distributor has not allocated receipt of
payment under 830 CMR 94.323.1(5)(b)1.
Distributor, any person who engages in
the sale of beverage containers to dealers, including any bottler or dealer who
engages in such sales.
Fund balance, an amount, determined in
accordance with 830 CMR 94. 323.1(3)(a) and (b), that corresponds to the amount
that would be in the Deposit Transaction Fund on the last day of each month if
the Deposit Transaction Fund were to be fully funded.
Month, calendar month, or, where
applicable, a fraction thereof.
Non-reusable beverage container, any
beverage container so constructed and designed that it is structurally
incapable of being refilled and resold by a bottler or distributor at least ten
times after its initial use.
Refund value, an amount of not less
than five cents that is charged for each non-reusable beverage container sold
by bottler or distributor.
Sales invoice, a written account, or
other itemized statement of merchandise shipped or sold by a bottler or
distributor evidencing the quantity, value, prices, and charges relating to the
merchandise shipped or sold.
Sold, includes any transfer of title
or possession, or both, exchange, barter, lease, rental, conditional or
otherwise, of non-reusable beverage containers for a consideration, in any
manner or by any means whatsoever.
(3)
Deposit Transaction
Fund.
(a)
General
rule. Every bottler and distributor subject to the provisions of
M.G.L. c. 94, § 323(c), (d) or (e) must establish and maintain an account
known as the Deposit Transaction Fund. The Deposit Transaction Fund is a fund
determined by reference to the refund values received by a bottler or
distributor for non-reusable beverage containers.
(b)
Fund balance.
Except as provided in 830 CMR 94.323.1(3)(c), on the last day of each month,
every bottler and distributor must determine its Deposit Transaction Fund fund
balance for such month as follows:
1. the fund
balance on the last day of the previous month, less interest income earned in
that previous month, less abandoned deposit amounts paid to the Commissioner
for that previous month, as determined by 830 CMR 94.323.1(5), plus any
reimbursements due from the Commissioner for that previous month, as determined
by 830 CMR 94.323.1(6);
2. plus the
refund values received during the month for non-reusable beverage
containers;
3. plus interest income
earned during the month on the Deposit Transaction Fund;
4. minus the refund values paid during the
month for non-reusable beverage containers returned, not including any handling
charges.
(c)
Initial Fund Balance.
1.
Bottlers and distributors
beginning business before January 1, 1990. Bottlers and
distributors in business and subject to the provisions of M.G.L. c. 94, §
323(c), (d) or (e), before January 1, 1990, must begin payment of abandoned
deposit for the month of April, 1990, with the first payment of abandoned
deposit amounts payable to the Commissioner on or before May 10, 1990. For
purposes of calculating abandoned deposit amounts payable to the Commissioner
on or before May 10, 1990, the initial "fund balance on the last day of the
previous month," (that is, the fund balance on March 31, 1990) is a number
equal to the refund values received by such bottlers and distributors for
non-reusable beverage containers during the months of January, February and
March, 1990. However, the actual amount of money required to be placed into the
Deposit Transaction Fund on March 31, 1990, must equal abandoned deposit
amounts paid to the Commissioner in January, February and March, 1990, under
St. 1989, c. 653, including the retroactive funding provisions of St. 1989, c.
653, § 237.
2.
Bottlers and distributors beginning business on or after January 1,
1990. Bottlers and distributors who begin business and become
subject to the provisions of M.G.L. c. 94, § 323(c), (d) or (e), on or
after January 1, 1990, must start making payment of abandoned deposit amounts
beginning with the fourth month, or fraction thereof, of business operations,
with the payment therefor being due the Commissioner by the tenth day of the
fifth month, or fraction thereof, after beginning business operations. For all
such bottlers and distributors their initial "fund balance on the last day of
the previous month," (that is, their fund balance on the last day of the third
month, or fraction thereof, beginning with the calendar month during which
business operations start), is a number equal to the refund values received by
such bottlers and distributors during the first three months, or fraction
thereof, of their business operations. However, the actual amount of money
required to be placed into the Deposit Transaction Fund on the last day of such
three month period must equal the refund values received less refund values
paid out for returns of non-reusable beverage containers during the first three
months, or fraction thereof, of their business operations.
(d)
Monthly funding of Deposit
Transaction Fund. Every bottler and distributor subject to the
provisions of M.G.L. c. 94, § 323(c), (d), or (e), must place into the
Deposit Transaction Fund on the last day of each month an amount equal to the
difference between the refund values received by the bottler or distributor
during the month for non-reusable beverage containers and the refund values
paid out by the bottler or distributor during the month for returns of
non-reusable beverage containers.
(e)
Maintenance of Deposit
Transaction Fund. Bottlers and distributors must maintain their
Deposit Transaction Fund accounts separate and apart from their other revenues
and accounts. The Deposit Transaction Fund accounts must be interest bearing or
non-interest bearing trust accounts, including, but not limited to, savings
accounts, checking accounts, NOW accounts, or money market accounts,
established and maintained in any bank, savings and loan institution, or credit
union located and authorized to do business in Massachusetts. Upon approval of
the Commissioner, a bottler or distributor may place its Deposit Transaction
Fund accounts in a bank, savings and loan institution, or credit union not
located in Massachusetts on the condition that the bottler or distributor posts
a bond or other security acceptable to the Commissioner. Funds in these
accounts must be subject to withdrawal upon request and without delay. The
account must be titled, "Deposit Transaction Fund for the benefit of consumers
and the Commonwealth of Massachusetts," with the bottler or distributor
maintaining the account as trustee.
(f)
Use of Deposit Transaction
Fund. Other than interest income, money in a Deposit Transaction
Fund is not income to bottlers and distributors, and may not be appropriated
for their own use or to pay handling fees under M.G.L. c. 94, § 323(c),
(d), and (e). Bottlers and distributors may expend money from the Deposit
Transaction Fund only for the following purposes:
1. to pay dealers, distributors, and
redemption centers the refund values of non-reusable beverage containers
returned to the bottler or distributor, as required by M.G.L. c. 94, c. 323(c),
(d), and (e);
2. to pay over to the
Commissioner abandoned deposit amounts, as determined by 830 CMR
94.323.1(5);
3. to withdraw for
their own use interest income earned on money in the Deposit Transaction Fund,
as allowed by M.G.L. c. 94, § 323C; and,
4. to withdraw amounts for the stated
purposes upon which an application to borrow pursuant to 830 CMR 94.323.1(7)
was approved.
(4)
Monthly Reporting to the
Commissioner.
(a)
General rule. On or before the tenth day of each
month, every bottler or distributor maintaining, or required to maintain, a
Deposit Transaction Fund, as required by M.G.L. c. 94, § 323(h), and 830
CMR 94.323.1, must file with the Commissioner a report on DOR Form AD-1 of all
transactions affecting the Deposit Transaction Fund for the preceding month, or
fraction thereof, and pay over to the Commissioner any abandoned deposit
amounts, as determined by 830 CMR 94.323.1(5).
(b)
Content. Each
monthly report must include the following information:
1. The number of non-reusable beverage
containers for which refund values have been received during the month in
question, and, the number of non-reusable beverage containers returned for
which refund values have been paid during the month in question;
2. The refund values received for
non-reusable beverage containers during the month in question and in the two
preceding months, and the amount paid from the Deposit Transaction Fund for
returns of non-reusable beverage containers during the month in
question;
3. All interest income
earned on amounts held in the Deposit Transaction Fund during the month in
question and any interest income that remains in the Deposit Transaction Fund
from any previous months;
4. The
fund balance as determined by 830 CMR 94.323.1(3)(b) and (c), for the Deposit
Transaction Fund on the last day of the month in question and on the last day
of the preceding month;
5. The
abandoned deposit amounts, as determined by 830 CMR 94.323.1(5), paid to the
Commissioner for the immediately preceding 24 months;
6. The amount of reimbursements received by
the bottler or distributor pursuant to 830 CMR 94.323.1(6), for the immediately
preceding 24 months.
(5)
Abandoned Deposit
Amounts.
(a)
General
rule. As of the last day of each month, every bottler or
distributor must determine the abandoned deposit amounts in their Deposit
Transaction Funds, and must turn over to the Commissioner all abandoned deposit
amounts for the month in question.
The abandoned deposit amounts for the month in question that
must be turned over to the Commissioner are determined by subtracting from the
fund balance the following amounts:
1.
interest income earned during the month in question on the Deposit Transaction
Fund;
2. the total amount of refund
values received by the bottler or distributor during the month in question and
the two preceding months for non-reusable beverage containers; and
3. the total amount of refund values received
by the bottler or distributor during the month in question and the two
preceding months for non-reusable beverage containers delivered to distributors
and dealers in the Commonwealth where the container was subsequently shipped
outside the Commonwealth for ultimate sale to consumers.
(b)
Methods for Determining
Monthly Refund Values Received. A bottler or distributor subject
to the provisions of M.G.L. c. 94, § 323(c), (d), or (e), must adopt, for
the purposes of 830 CMR 94.323.1, either the cash basis method or the accrual
basis method for determining monthly refund values received.
1.
Cash Basis
Method. In computing abandoned deposit amounts, and any other
calculations required by 830 CMR 94.323.1, bottlers and distributors using the
cash basis method must allocate every payment received on a sales invoice for
beverages in non-reusable beverage containers first to the payment for the
refund values of the non-reusable beverage containers. Each such payment
received must be so allocated until the entire amount of refund values
reflected in the invoice is paid in full into the Deposit Transaction Fund.
Further, such bottlers or distributors must add to the amounts allocated under
830 CMR 94.323.1(5)(b), as additional refund values received on a sales
invoice, the total amount of deposit receivables for the month immediately
preceding the three month period used in the calculation of abandoned deposit
amounts referred to under 830 CMR 94.323.1(5)(a). Any subsequent payments
attributable to the sales invoice that represent refund values received for
non-reusable beverage containers that have been paid over to the Commissioner
as deposit receivables in accordance with 830 CMR 94.323.1(5)(b)1. become the
property of the bottler or distributor. A bottler or distributor adopting the
cash basis method must state on its DOR Form AD-1 that all calculations are
made in accordance with the cash basis method for determining abandoned deposit
amounts. A bottler or distributor may not change from the cash basis method of
calculating its abandoned deposit amounts without the express written
permission of the Commissioner.
2.
Accrual basis method. As an alternative to 830 CMR
94.323.1(5)(b)1., a bottler or distributor may elect to compute its abandoned
deposit amounts, and any other calculations required by 830 CMR 94.323.1, by
substituting for 830 CMR 94.323.1(5)(a)2., the following: "the total amount of
refund values for non-reusable beverage containers sold during the month in
question and in the two preceding months for non-reusable beverage containers."
A bottler or distributor that determines abandoned deposit amounts in
accordance with the accrual basis method described in 830 CMR 94.323.1(5)(b)2.,
shall not allocate payments to refund values received, as described in 830 CMR
94.323.1(5)(b)1.. Also, such bottler or distributor must state on its DOR Form
AD-1 that all calculations are made in accordance with the accrual basis method
for determining abandoned deposit amounts. A bottler or distributor may not
change from the accrual basis method of calculating its abandoned deposit
amounts without the express written permission of the Commissioner.
(c)
Abandoned deposits
amounts upon transfer or termination of business operations.
1.
General rule for final payment
of abandoned deposits. Any bottler or distributor subject to the
provisions of M.G.L. c. 94, § 323(c), (d), or (e), who sells, transfers,
or otherwise terminates its business operations must transfer to the
Commissioner within ten days of the last day of the month in which it
terminates its business operations, as abandoned deposit amounts, all amounts
required to be in such bottler or distributor's Deposit Transaction
Fund.
2.
Deposit
receivables as abandoned deposit amounts from cash basis bottlers or
distributors. In addition to the rule for final payment of
abandoned deposit amounts under 830 CMR 94.323.1(5)(c)1, any bottler or
distributor subject to the provisions of M.G.L. c. 94, § 323(c), (d), or
(e), who reports to the Commissioner using the cash basis method for
determining abandoned deposit amounts in accordance with 830 CMR
94.323.1(5)(b)1, must transfer to the Commissioner within ten days of the last
day of the month in which it sells, or otherwise terminates its business
operations, as additional abandoned deposit amounts, an amount equal to its
deposit receivables.
3.
Abandoned deposit amounts upon sales of business
operations. As an alternative to the payment of abandoned deposit
amounts as described in 830 CMR 94.323.1(5)(c)1. and 2., the Commissioner may
allow a bottler or distributor subject to the provisions of M.G.L. c. 94,
§ 323(c), (d), or (e), who sells its business operations to another
bottler or distributor subject to the provisions of M.G.L. c. 94, §
323(c), (d), or (e), to turn over to the Commissioner within ten days of the
last day of the month in which it sells its business operations all abandoned
deposit amounts due under 830 CMR 94.323.1(5)(a), and, thereafter, to transfer
to the purchaser all amounts that should be in the Deposit Transaction Fund.
This alternative may be allowed only where the bottler or distributor
purchasing the business operations assumes all responsibilities and obligations
under M.G.L. c. 94, § 321 through 327, inclusive, and 830 CMR 94.323.1, of
the bottler or distributor selling its business operations.
(f)
Interest on
underpayments. Any bottler or distributor failing to make full and
timely payments to the Commissioner of abandoned deposit amounts, as required
by 830 CMR 94.323.1(5), must pay interest on any unpaid amounts, computed at
the rate of 11/2 % for each month, or part thereof, during which such
failure to pay continues, as required by M.G.L. c. 94, § 327.
(g)
Penalties. Any
bottler or distributor failing to make full and timely payments to the
Commissioner of abandoned deposit amounts, as required by 830 CMR 94.323.1(5),
is subject to all penalties, additions to tax, and other similiar charges
authorized under M.G.L. c. 62C.
(6)
Reimbursements.
(a)
General rule. If
in any month in which the provisions of 830 CMR 94.323.1, apply, a bottler or
distributor has paid out for returns an amount in excess of the amount of the
unclaimed refund values for the most recent three month period, the
Commissioner will reimburse the bottler or distributor, without interest, in an
amount equal to the excess, if any, of zero over the ending fund balance for
such month. However, the amount of reimbursement payable by the Commissioner to
a bottler or distributor for such month may not exceed the following amount:
1. amounts paid by the bottler or distributor
to the Commissioner as abandoned deposit amounts, as determined by 830 CMR
94.323.1(5), during the immediately preceding 24 months; minus,
2. amounts paid by the Commissioner to the
bottler or distributor as reimbursements pursuant to 830 CMR 94.323.1(6),
during the immediately preceding 24 months.
Where any portion of the reimbursement is disallowed by reason
of the foregoing limitations, such portion shall be allowed as an offset to
reduce abandoned deposit amounts payable to the Commissioner under 830 CMR
94.323.1(5), in succeeding months. Such offset must be applied in the first
succeeding month for which abandoned deposit amounts are payable. Any amount of
the offset remaining after such application may be carried forward in the same
manner to succeeding months for which abandoned deposit amounts are payable,
provided that the amount of the offset carried forward shall be reduced from
month to month by the amount of the offset that was applied in each
month.
(b)
Credits and reimbursements on underfunded Deposit Transaction
Funds.
1. If at the end of any
month in which the provisions of 830 CMR 94.323.1, apply, a bottler or
distributor who has borrowed against the Deposit Transaction Fund under 830 CMR
94.323.1(7), has paid out for returns an amount in excess of the amount of
unclaimed refund values placed in the Deposit Transaction Fund for the most
recent three month period, but which are not in excess of the fund balance
under 830 CMR 94.323.1(3)(a) through (c), excluding interest income, such
bottler or distributor is allowed a credit against the amount owed to the
Deposit Transaction Fund. The amount of such credit is the amount by which the
payments during the month for returns exceed the amount of unclaimed refund
values placed in the Deposit Transaction Fund for the most recent three month
period, excluding interest income and excluding the bottler's or distributor's
payments from the Deposit Transaction Fund during the month for returns,
provided that the amount of such credit shall not exceed the amount owed to the
Deposit Transaction Fund.
2. If at
the end of any month in which the provisions of 830 CMR 94.323.1, apply, a
bottler or distributor who has been allowed to borrow from the Deposit
Transaction Fund, under 830 CMR 94.323.1(7), has paid out for returns an amount
in excess of both the amount of unclaimed refund values placed in the Deposit
Transaction Fund for the most recent three month period, and the fund balance
under 830 CMR 94.323.1(3)(a) through (c), excluding interest income, the
Commissioner will reimburse such bottler or distributor, without interest, in
an amount equal to the amount that would be reimbursed under 830 CMR
94.323.1(6)(a). In addition to such reimbursement, the bottler or distributor
is allowed a credit against the amount owed to the Deposit Transaction Fund.
The amount of such credit is the amount by which the payments during the month
for returns exceed the sum of the following:
a. the reimbursement to the bottler or
distributor under 830 CMR 94.323.1(6)(b)2.; and
b. an amount equal to the unclaimed refund
values for the most recent three month period minus the bottler's or
distributor's payments from the Deposit Transaction Fund during the month for
returns;
provided, however, that the amount of such credit shall not
exceed the amount owed to the Deposit Transaction Fund.
(7)
Borrowing From the Deposit Transaction Fund.
(a)
General rule.
Any bottler or distributor may apply to the Commissioner to borrow, without
interest, from its Deposit Transaction Fund. The Commissioner will allow a
bottler or distributor to borrow from its Deposit Transaction Fund only for
good cause, which, for the purposes of 830 CMR 94.323.1(7), requires proof of
immediate business operating expenses that cannot be paid from other funds of
the bottler or distributor or with the proceeds of a loan from a bank or other
financial lending institution. An application to borrow from the Deposit
Transaction Fund will be allowed only under such terms and conditions as the
Commissioner, in his sole discretion, deems appropriate. Notwithstanding the
approval of an application to borrow from the Deposit Transaction Fund, the
Commissioner may withdraw or modify such approval at any time and require a
bottler or distributor to repay immediately any or all amounts borrowed from
the Deposit Transaction Fund, if the application to borrow from the Deposit
Transaction Fund contains any false statements, or if the Commissioner
determines that delay in repayment will jeopardize the payment or collection of
abandoned deposit amounts or that the amounts borrowed from the Deposit
Transaction Fund have been used for purposes other than those stated in the
application, as required by 830 CMR 94.323.1(7)(b).
(b)
Application
procedures. The following are some, but not necessarily all, of
the conditions upon which the Commissioner will allow an application to borrow
from a Deposit Transaction Fund.
1. The
application to borrow must be made in writing to the Commissioner.
2. The application to borrow must include a
statement of all relevant facts and circumstances in support of the claim of
immediate business operating expenses. The bottler or distributor also must
submit an affidavit stating how it will use the amount borrowed.
3. The amount borrowed must be evidenced by a
written note or other instrument of indebtedness payable to and enforceable by
the Commissioner on behalf of the Commonwealth, and must be repaid within six
months, in equal monthly installments, unless the Commissioner expressly
requires or allows otherwise.
4.
The amount borrowed must be secured in full by the property of the bottler or
distributor or by the posting of a bond or similar surety payable or assignable
to the Commissioner on behalf of the Commonwealth in the event of a default in
repayment by the bottler or distributor.
5. The amount borrowed may not exceed 75% of
the cash balance, less interest, contained in the Deposit Transaction Fund at
the time of the application.
6. The
amount borrowed must be used only for the immediate business operating expenses
upon which the application was granted.
(c)
Notification by the
Commissioner. The Commissioner will mail the bottler or
distributor written notification of the decision on the application to borrow
from the Deposit Transaction Fund.
(d)
Minimum monthly payments to
the Deposit Transaction Fund. Every bottler or distributor that
receives permission from the Commissioner to borrow from the Deposit
Transaction Fund must repay the amount borrowed from its Deposit Transaction
Fund on or before any date determined by the Commissioner pursuant to 830 CMR
94.323.1(7). Notwithstanding the filing or approval of an application to
borrow, every bottler and distributor must make a minimum monthly payment into
the Deposit Transaction Fund for each month after December, 1989, of the
following amounts:
1. An amount equal to the
refund values received each month by the bottler or distributor for
non-reusable beverage containers less the refund values paid out during the
month by the bottler or distributor for returns of non-reusable beverage
containers,
2. Such additional
amount as required by the Commissioner pursuant to 830 CMR 94.323.1(7)(b)3.,
constituting the monthly repayment of the amount borrowed.
(e)
Payment of Abandoned Deposit
Amounts. Notwithstanding the filing or approval or denial of an
application to borrow from the Deposit Transaction Fund, every bottler or
distributor must pay over to the Commissioner each month the full abandoned
deposit amount as determined by 830 CMR 94.323.1(5).
(8)
Enforcement
Provisions.
(a)
General rule. The collection of abandoned deposits
amounts, as determined by 830 CMR 94.323.1(5), and the payment of amounts to
the Deposit Transaction Fund, as determined by 830 CMR 94.323.1(3), is governed
by the provisions of M.G.L. c. 62C, to the extent not inconsistent with the
provisions of M.G.L. c. 94, § 321 through 327, inclusive. The term
"governed by the provisions of M.G.L. c. 62C" means that the Commissioner can
apply all of the provisions in M.G.L. c. 62C that are relevant to the
administration, payment, and collection of taxes to the extent that such
provisions are not inconsistent with the provisions of M.G.L. c. 94, § 321
through 327, inclusive. The application of the provisions of M.G.L. c. 62C
includes, but is not limited to, the following.
1.
Assessments. The
Commissioner will treat the filing of a report, as prescribed by 830 CMR
94.323.1, similar to the filing of a return for the assessment of taxes in
determining the amount of abandoned deposit amounts owed the Commonwealth and
the amount due the Deposit Transaction Fund. The Commissioner will apply the
provisions of M.G.L. c. 62C, and all regulations thereunder, in determining the
abandoned deposit amount due the Commonwealth and the amount due the Deposit
Transaction Fund. Included in the Commissioner's authority under M.G.L. c. 62C
is the authority to make double assessments under M.G.L. c. 62C, § 28; and
jeopardy assessments under M.G.L. c. 62C, § 29.
2.
Record Retention.
Consistent with the provisions of the Record Retention Regulation
830 CMR
62C.25.1(12)(k), any bottler
or distributor must preserve and maintain permanent books of account or records
sufficiently accurate and complete to establish abandoned deposit amounts
including the total amount of refund values in its Deposit Transaction Fund
entitled to be subtracted therefrom pursuant to the provisions of 830 CMR
94.323.1(5)(a)3.
3.
Liens Upon Property. Any bottler or distributor
required to pay abandoned deposit amounts or pay amounts to a Deposit
Transaction Fund, or pay interest, penalties, additions to tax, or other
similar charges, who fails to pay the same after demand, is subject to a lien
in favor of the Commonwealth upon all property or rights to property, whether
real or personal, belonging to such bottler or distributor to the extent of all
amounts due. The lien arises at the time the bottler or distributor files a
report with the Commissioner, as required by 830 CMR 94.323.1(4), or when the
Commissioner otherwise determines that an amount is due, and continues until
the amount due is satisfied. See M.G.L. c. 62C, § 50; and
830 CMR
62C.50.1.
4.
Levy Upon
Property. If any bottler or distributor required to pay abandoned
deposit amounts or pay amounts to a Deposit Transaction Fund, or pay interest,
penalties, additions to tax, or other similar charges, fails to pay the same
within ten days after demand, the Commissioner may collect the amount due, and
any further sums sufficient to cover the expenses of a levy, by levying upon
the property and rights to property of the bottler or distributor, or upon
property on which there is a lien, in accordance with M.G.L. c. 62C, § 53.
Included in the Commissioner's authority to levy is authority to make a notice
and demand for immediate payment of amounts due, and, upon failure or refusal
to pay, to collect by levy without regard to the ten day period provided by
M.G.L. c. 62C, § 53, if the Commissioner finds that the collection of the
amounts due is in jeopardy.
(9)
Examples. The
following examples illustrate the principles for calculating fund balance
amounts, abandoned deposit amounts, and reimbursements, as provided by 830 CMR
94.323.1.
Example 1. DeSola Distributors is a
soft drink bottler and distributor subject to the provisions of M.G.L. c. 94,
§ 323(c) and (d). On January 1, 1990, and thereafter, DeSola conducted
business as a Massachusetts bottler and distributor. DeSola received and
deposited into its Deposit Transaction Funds refund values of $3,200, $3,300
and $3,500, for the months of January, February and March 1990, respectively,
for non-reusable beverage containers sold in Massachusetts. During the month of
April, 1990, DeSola also deposited into its Deposit Transaction Fund $3,500,
representing the refund values received in April, 1990 for non-reusable
beverage containers it sold in Massachusetts. Also in April, it paid out of its
Deposit Transaction Fund $2,600, representing the refund values for
non-reusable beverage containers from Massachusetts returned by dealers.
Finally, DeSola earned $100 of interest on its Deposit Transaction Fund in the
month of April.
On or before February 10, 1990, DeSola must file a report on
DOR Form AD-1 with the Commissioner of Revenue detailing all the transactions
affecting its Deposit Transaction Fund. Also, on or before May 10, 1990, as
required by M.G.L. c. 94, § 323D, DeSola must pay to the Commissioner from
its Deposit Transaction Fund an amount equal to its abandoned deposit amounts
for the month of April, 1990. The following account entries illustrate the
calculations necessary for determining the fund balance on April 30, 1990, and
the abandoned deposit amount due for April, 1990.
Calculation of Fund Balance on April 30,
1990
Fund balance on last day of previous month*
|
January, 1990 |
$3,200 |
|
February, 1990 |
3,300 |
|
March, 1990 |
3,500 |
|
10,000 |
$10,000 |
* Solely for computing the fund balance on April 30, 1990, the
previous month's fund balance amount is the aggregate refund values received by
the bottler or distributor in January, February, and March of 1990.
|
Plus refund values received during April for
non-reusable containers |
3,500 |
|
Plus interest income earned during
April |
100 |
|
Sub total |
13,600 |
|
Less refund values paid during April for returned
non-reusable containers |
(2,600) |
|
Fund balance on April 30, 1990 |
$11,000 |
|
Calculation of Abandoned Deposit Amounts
for April, 1990 |
|
Fund balance on April 30, 1990 |
$11,000 |
|
Less interest income earned during
April |
(100) |
|
Less refund values received for non-reusable
containers during last three month period |
|
February, 1989 |
$3,300 |
|
March, 1989 |
3,500 |
|
April, 1990 |
3,500 |
|
10,300 |
(10,300) |
|
Abandoned deposit amounts due to Commissioner (never
less than -0-) |
$600 |
Example 2. In May, 1990, DeSola
received refund values of $2,900 for non-reusable beverage containers it sold
to dealers in Massachusetts. DeSola paid out from its Deposit Transaction Fund
$3,600 for non-reusable beverage containers returned by dealers. Also, in the
month of May, DeSola earned $120 in interest income on its Deposit Transaction
Fund.
On or before June 10, 1990, DeSola must file with the
Commissioner of Revenue DOR Form AD-1 detailing all the transactions affecting
its Deposit Transaction Fund during the month of May, 1990. The following
account entries illustrate the calculations necessary for determining the fund
balance on May 31, 1990, and the abandoned deposit amount due for the month of
May, 1990.
|
Calculation of Fund Balance on May 31,
1990. |
$11,000 |
|
Fund balance on April 30, 1990 |
|
Less interest earned during April (whether or not
withdrawn) |
(100) |
|
Less abandoned deposit amounts payable to the
Commissioner for the month of April |
(600) |
|
Plus any reimbursements due from Commissioner for the
month of April |
-0- |
|
Subtotal before computing May
activities |
10,300 |
|
Plus refund values received during May for
non-reusable containers |
2,900 |
|
Plus interest income earned during
May |
120 |
|
Less refund values paid during May for returned
non-reusable containers |
(3,600) |
|
Fund balance on May 31, 1990 |
$9,720 |
|
Calculation of Abandoned Deposits for
May, 1990 |
|
Fund balance amount on May 31, 1990 |
$9,720 |
|
Less interest income earned during
May |
(120) |
|
Less refund values received for
non-reusable |
|
containers during last three month period |
|
February, 1990 |
$3,500 |
|
March, 1990 |
3,500 |
|
April, 1990 |
2,900 |
|
9,900 |
(9,900) |
|
Abandoned deposit amounts due to Commissioner (never
less than -0-) |
-0- |
Example 3. In June, 1990, DeSola
received refund values of $3,400 for non-reusable beverage containers sold in
Massachusetts, but was required to pay $13,700 in refunds for Massachusetts
non-reusable beverage containers. Also, in June, 1990, DeSola earned $20 of
interest on its Deposit Transaction Fund.
On or before July 10, 1990, DeSola must file with the
Commissioner of Revenue DOR Form AD-1 detailing all of the transactions
affecting its Deposit Transaction Fund for June, 1990. The following account
entries illustrate the calculations necessary for determining the fund balance
on June 30, 1990, the abandoned deposit amount due for the month of June, 1990,
and, in this example, the reimbursement due DeSola for the month of June,
1990.
|
Calculation of Fund Balance on June 30,
1990 |
|
Fund balance on May 31, 1990 |
$9,720 |
|
Less interest earned during May (whether or not
withdrawn) |
(120) |
|
Less abandoned deposit amounts payable to the
Commissioner for the month of May |
-0- |
|
Plus any reimbursements due from Commissioner for the
month of May |
-0- |
|
Subtotal before computing June
activities |
9,600 |
|
Plus refund values received during June for
non-reusable containers |
3,400 |
|
Plus interest income earned during
June |
20 |
|
Less refund values paid during June for returned
non-reusable containers |
(13,700) |
|
Fund balance on June 30, 1990 |
($680) |
|
Calculation of Abandoned Deposits for
June, 1990 |
|
Fund balance on June 30, 1990 |
($680) |
|
Less interest income earned during June Less refund
values received for non-reusable containers during last three month
period |
(20) |
|
April, 1990 |
$3,500 |
|
May, 1990 |
2,900 |
|
June, 1990 |
3,400 |
|
9,800 |
(9,800) |
|
Abandoned deposit amounts due to Commissioner (never
less than -0-) |
-0- |
|
Calculation of Reimbursement for June,
1990 |
|
Fund balance on June 30, 1990 |
(680) |
|
Less interest income earned during
June |
(20) |
|
Fund balance amount on June 30, 1990 excluding
interest income |
(700) |
|
Reimbursement due from Commissioner for June,
ordinarily the amount needed to bring the balance to zero, but limited to the
excess of: |
$600 |
(a) amounts paid
by the bottler or distributor to the Commonwealth as abandoned deposit amounts
in the preceding 24 months (here, $600 for April, 1990), over
(b) amounts paid by the Commonwealth to the
bottler or distributor as reimbursements during the same 24 month period (here,
the unpaid reimbursement ($100) will be allowed as an offset against future
abandoned deposit amounts.)
Example 4. In July, 1990, DeSola
received refund values of $13,000 for non-reusable beverage containers sold in
Massachusetts, and paid out $1,000 in refunds for Massachusetts non-reusable
beverage containers. Also, in July, 1990, DeSola earned $100 of interest income
on the Deposit Transaction Fund.
On or before August 10, 1990, DeSola must file with the
Commissioner of Revenue DOR Form AD-1 detailing all of the transactions
affecting its Deposit Transaction Fund for July, 1990. The following account
entries illustrate the calculations necessary for determining the fund balance
on July 31, 1990, and the abandoned deposit amount due for the month of July,
1990.
|
Calculation of Fund Balance Amount on
July 31, 1990 |
|
Fund balance on June 30, 1990 |
($680) |
|
Less interest income earned during June (whether or
not withdrawn) |
(20) |
|
Plus any reimbursements due from Commissioner for the
month of June |
600 |
|
Subtotal before computing July
activities |
(100) |
|
Plus refund values received during July for
non-reusable containers |
13,000 |
|
Plus interest earned during July |
100 |
|
Less refund values paid during July for returned
non-reusable containers |
(1,000) |
|
Fund balance on July 31, 1990 |
$12,000 |
|
Calculation of Abandoned Deposit Amounts
for July, 1990 |
|
Fund balance on July 31, 1990 |
$12,000 |
|
Less interest income earned during
July |
(100) |
|
Less refund values received for non-reusable
containers during last three month period |
|
May, 1990 |
$2,900 |
|
June, 1990 |
3,400 |
|
July, 1990 |
13,000 |
|
19,300 |
(19,300) |
|
Abandoned deposit amounts due to Commissioner (never
less than -0-) |
-0- |
REGULATORY AUTHORITY
Emergency Regulation:1/30/90; 4/27/90
Promulgated: 8/3/90
New Regulation Promulgated: 5/3/96
Amended: 4/18/08 - subsection (1)(a), (5)(a), (5)(a)1,
(5)(a)2, (8)(a)
